Threat and Reality of Common Carrier Regulation Reduced U.S. telecom investment $150 Billion to $200 Billion

Between 2011 and 2015 (the last year data are available), the threat of reclassification reduced telecommunications investment by about 20 percent to 30 percent, or about $30 to $40 billion annually, according to George Ford, Phoenix Center for Advanced Legal and Economic Public Policy Studies chief economist.

In other words, over the interval 2011 to 2015, another $150-$200 billion in additional investment would have been made “but for” Title II reclassification, he argues.

Actual investment averaged $126 billion annually. But the average investment over the five-year window would have been about $160 billion (or more) annually, in the absence of concern over the rules, Ford argues.

“Notably, I find no decline in investment following the release of the FCC’s “Four Principles” to promote an Open Internet in 2005, suggesting it is reclassification—and not neutrality principles—that is reducing investment,” says Ford.

In other words, rules that ensure that consumers have access to all lawful apps, without blocking or hinderance, did not seem to reduce investment. Common carrier regulation did, Ford argues.